Here is Level 3’s plan to make interconnection fees a network neutrality issue

The gloves are coming off in the fight to prevent ISPs from charging content providers and middle mile transit companies a fee to deliver web content to the end consumer. Earlier this week Level 3 Communications, a transit provider wrote a post that claimed interconnection fees should be a network neutrality issue and then on Thursday Netflix CEO Reed Hastings posted a blog post and submitted a filing to the FCC that said the same thing.

On Friday Level 3 filed its formal comments to the agency, and both give examples of what they see as ISPs trying to collect tolls in the middle of the network.

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This is the problem

One way ISPs justify their interconnection fees is to point out that they will exchange traffic for free — so long as it is between “peers” or networks of equal size. They use traffic ratios to determine this and publish those rations online or in a publicly available database. However, Hastings said in this blog post that when Netflix suggested that it could become a peer to ISPs by making the upstream and downstream traffic burden it was imposing equal (and thus meeting the direct peering definition), “there is an uncomfortable silence.”

Meanwhile, Level 3’s filing claims that the company sought to peer with an ISP and was rebuffed even though it had offered to split the cost of connecting the two networks by paying for more ports and servers. It then showed two charts that illustrate how the single port it had with this unnamed ISP became congested at the same time every week as the ISP’s end users demanded more content.

Level 3 and Netflix argue that these are tolls placed by the ISP, which restrict the content providers’ ability to get their traffic to the end user. They argue that this is the same as discrimination on the last mile network, even though it is happening further upstream where the middle mile meets the last mile.

A solution for peering disputes?

So Level 3 has proposed that the FCC should require ISPs to interconnect on “commercially reasonable terms, without the payment of an access charge.”
Level 3 wants the FCC to say that access charges, where an ISP charges those it exchanges traffic with for the privilege of reaching its users, are not commercially reasonable. It then suggests some basics on how the FCC should think about “commercially reasonable terms.”

Basically, Level 3 wants an ISP to add more capacity at congested areas at no charge or offer another point of interconnection in the geographic area where it will provide interconnection without charge. It’s unclear if Level 3’s definition of no charge, means that Level 3 won’t help offset the cost of the gear to provide more capacity.

As a way of mitigating the burden such rules would lay on ISPs, Level 3 suggests that ISPs would only have to interconnect with large networks. It also notes that the FCC could implement this rule without imposing common carrier rules on ISPs, which the agency is clearly unwilling to do.

Level 3 says in its filing:

This proposed rule would directly target the threat large, last-mile bottleneck ISPs pose to the free and open Internet when they attempt to leverage their control over access to their users to generate inefficient rents and harm their competitors. Yet the proposed policy would not prevent ISPs from offering services, such as transit services or CDN services, to those that wish to interconnect with them (whether edge providers or others), provided that they also offer interconnection on commercially reasonable terms as described above. The rule would simply prohibit ISPs from levying tolls for access to customers

Why now and will it work?

Today is the last day to file comments with the FCC on its decision to address network neutrality in the wake of a court decision that struck down most of the commission’s 2010 Open Internet Order that made network neutrality an actual rule in the first place. The courts agreed in principle that the FCC could ensure that ISPs didn’t discriminate on traffic going across their networks, but disagreed with how the FCC wrote the rules.

The agency is now trying to address this legal flub, and in doing so, seemingly opened the door to ensure that interconnection agreements between ISPs and internet content and transit providers are protected. But for consumers who are sick of a crappy online video experience, the question isn’t why this is happening now, but whether or not this is a strategy that will work.

And that’s uncertain. The problem of ISPs choking traffic to extract access charges is a real one, I’ve no doubt, but the FCC may not see it as a network neutrality issue. It is an issue, and I think the current FCC Chairman Tom Wheeler understands the issue based on my interview with him in January, when he called it a “cousin” of network neutrality.

Harold Feld, an SVP at Public Knowledge, says it is an interconnection issue, one that should be addressed only when we have that data to understand what’s going on. I tend to agree that data will be essential here and hope the FCC asks for it.”If Wheeler wants to get [the data], he knows where to look,” said Feld, who pointed out that LEvel 3 and Cogent would be happy to give it up if pressed and that Comcast and Time Warner Cable could be compelled to do so as part of their merger process.

So the next question here isn’t about pushing network neutrality necessarily, but about getting the data to understand the problem.

The FCC’s position on peering & interconnection is similar to Harold Feld’s: they’re both glad to offer an opinion as soon as someone explains the Internet to them. Preferably, the explanation should be by analogy to the telegraph networks of the 19th century.

Is Level 3 pulling a 180 on their prior position about who should pay for interconnection upgrades?

“We determined that the agreement that we had with Cogent was not equitable to Level 3. There are a number of factors that determine whether a peering relationship is mutually beneficial. For example, Cogent was sending far more traffic to the Level 3 network than Level 3 was sending to Cogentâ€™s network. It is important to keep in mind that traffic received by Level 3 in a peering relationship must be moved across Level 3’s network at considerable expense. Simply put, this means that, without paying, Cogent was using far more of Level 3’s network, far more of the time, than the reverse. Following our review, we decided that it was unfair for us to be subsidizing Cogent’s business.”

Nice find. For the ISP to accept more traffic from Level 3 is not simply a matter of opening up more ports at their interconnect, but then building out their internal network to carry that additional volume to end customers. I can’t see why an ISP should not be free to decide how they want to pay for that build out, whether by charging Level 3, or by charging the home customers.

A simple way to put pressure on ISPs to improve real world performance of their networks is by only allowing them to advertise that performance. The Standard internet tier on TWC would have to show the average Netflix bitrate during peak hours, as well as the other top ten providers, and a more general basket rate for the rest. No more 15 Mbps nonsense that really doesn’t tell the consumer anything about what they are paying for.

It would also force them to provide real improvements between tiers, rather than giving the same crappy service at every tier while pretending you get more for your money. I switched to 50 Mbps to test it out, and there was absolutely no real world change, other than Speedtest numbers, between Standard and Ultimate during peak hours. Stopping the blatant false advertising would go a long way towards improving peering issues.

The FCC currently has a docket open on IP-interconnection. Wouldn’t the Netflix and Level3 comments be better suited to that proceeding rather than the NN proceeding? Or is IP-interconnection something different than what you’re writing about here?